GBP
The pound notched its biggest one-week advance against the dollar since March 2020 last week, with the quid benefitting from a sharp improvement in risk appetite, and aggressive dollar softening, after a downside surprise in the latest US inflation figures.
The move took the quid north of the 100-day moving average for the first time since February, and to its strongest since mid-August, a sharp turnaround from the 37-year lows seen after the mini-budget just 6 weeks ago.
Fiscal policy will be the main item on this week’s agenda, with Thursday’s ‘Autumn Statement’ set to bring a significant round of tax hikes and spending cuts; while the latest labour market and inflation data will also be keenly watched.
EUR
The EUR also benefitted from significant dollar selling last week, vaulting back above parity, and to test the important resistance at 1.0340 which has marked a key level for the pair since all the way back in early-2017.
Thus far, however, the EUR’s recovery has been driven almost entirely by external factors, though the relatively warm winter experienced across the bloc thus far has given hope that drastic energy shortages can be avoided.
Looking ahead, that theme of external factors driving the currency is likely to remain in place this week, with the calendar lacking any notable data releases.
USD
Against a basket of peers, the buck fell to its lowest level since mid-August last week, with the market reacting violently to a cooler than expected 7.7% CPI print in October, and rapidly jumping to the conclusion that this will lead to a substantially more dovish FOMC outlook.
Said conclusion also led to equities rallying sharply, as Treasury yields plunged, all rapidly loosening financial conditions; something that Fed policymakers are likely to pushback on aggressively with the battle inflation far from won.
Looking ahead, this week’s calendar is a little quieter than last, with only the latest retail sales report of note.
World News
The trillion-dollar valued crypto industry faces its biggest challenge yet as major platform FTX faces bankruptcy, the whole crypto market has seen the effects of this, with Ethereum falling over 20% and all coins losing value, FTX’s competitor Binance calls for more regulation within the industry.
The UK and France are working together to solve the migrant issue, with 40,000 migrants arriving in the UK so far this year. Under the new agreement UK police officers will be embedded with their French counterparts in control rooms and on beaches, as well as the number of police involved will also increase. The Government has been under pressure over the Channel crossings, as UK Prime Minister noted that no ‘single thing’ can be done to ‘fix’ the situation.
Data Releases
| Date | Region | Release | Previous | Consensus |
| Tuesday 15th November | UK | Claimant Count Change | 25.5k | 17.3k |
| Wednesday 16th November | UK | CPI y/y | 10.10% | 10.50% |
| Wednesday 16th November | CA | CPI m/m | 0.10% | 0.70% |
| Wednesday 16th November | US | Retail Sales m/m | 0.00% | 0.90% |
| Thursday 17th November | UK | Autumn Forecast Statement | ||
ed
Indices
| Share Index | Prev. Close | Open |
| FTSE100 | 7318.04 | 7318.04 |
| DAX | 14244.86 | 14295.81 |
| CAC40 | 6594.62 | 6622.42 |